WA grain export crisis looms as key rail lines set to close at end of month

The future of WA's grain exports has been plunged into doubt as the deadline for the closure of some of the state's key freight rail lines looms.

Rail lines which transport grain to port will likely shut down at the end of this month as WA faces the task of getting the biggest harvest in history - worth an estimated $5.3 billion - to market.

Brookfield Rail and grain handlers CBH have been locked in a bitter dispute over access to Tier 3 lines, which Brookfield say carry about 4 per cent of total grain movements on the State Government-owned rail network.

The contract between Brookfield and CBH is due to expire at the end of this month, and negotiations have been kicked to the powerful Economic Regulation Authority.

CBH chief executive Andrew Crane has told a parliamentary inquiry that the closure of the lines would imperil the WA grain industry's ability to exploit growing Asian demand.

The deterioration of the rail network in Western Australia has been a looming crisis for many years.

CBH chief executive Andrew Crane

"The deterioration of the rail network in Western Australia has been a looming crisis for many years," he told the ABC outside the hearing.

"These are just symptoms of something that's not quite right here in the way we invest in the lines and maintain their viability.

"For the benefit of the state's economic development, the development of the ag[riculture] industry, its ability for it to capitalise on the Asian century, we have to deal with this issue."

CBH General Manager of Operations, Andrew Mencshelyi described the situation as a "ticking time bomb" as the lines continued to deteriorate without any clear indication of who was responsible for their maintenance.

Tier 3 closure 'will degrade country roads'

Mr Crane said if the lines closed on June 30, CBH would have to transport 500,000 tonnes of grain in trucks rather than on rail.

"There will be more wear and tear on the roads," he conceded.

"We're going to do our best to minimise the impact on the community."

The reality is grain on rail also requires help from the Government.

Brookfield Rail chief executive Paul Larsen

Brookfield's chief executive Paul Larsen told the inquiry grain transported on Tier 3 lines had been steadily declining in the past four years.

He said Brookfield's contract was varied after a 2009 review of the grain freight network found at the time it was cheaper to put grain on road rather than rail.

"The reality is grain on rail also requires help from the Government," he said.

"This was recognised when the Government privatised the railway."

Brookfield 'remains open' to running Tier 3 lines commercially

Mr Larsen said the lease was varied to reflect a move to mothball Tier 3 lines after a $120 million investment by the State Government in the road network was complete.

Brookfield remains open to operating Tier 3 lines commercially if an agreement could be reached which underwrote investment into the lines, he said.

Mr Larsen told the inquiry his company had paid the Government for the right to negotiate access to the rail network, and it would not consider leasing the rail to CBH.

Brookfield has a 50-year lease on the lines.

In a written statement to ABC News Online, Mr Larsen said the core problem was that road freight transport did not pay the true cost of using roads.

Mr Larsen said, for the rail industry to remain competitive, it could not charge access rates that covered costs.

He said Brookfield had invested more than $2 billion into the state-wide railway network, which is also used to carry mining freight, to increase volumes.

"Despite challenges with Tier 3 lines, over the last six months our rail network has supported a record harvest of 15.85 million tonnes, transporting grain on rail at an annualised rate of over 10 million tonnes to WA ports," he said.